Wall Street Journal, December 29, 2010

“Malign” Afghans Targeted

U.S. and Afghan Allies Describe Web of Corruption but Say Prosecution Stalls

By Matthew Rosenberg

KABUL—U.S. officials in Afghanistan have spent thousands of hours over the past few years charting what they call "Malign Actor Networks"—webs of connections between members of President Hamid Karzai's family, businessmen, corrupt officials, drug traffickers and Taliban commanders.

Wall Street Journal, Dec. 29, 2010: Mr. Azimi of Afghan United Bank, in his Kabul office this month, denied corruption allegations against him. Mr. Azimi has bribed senior officials, moved money for drug traffickers and kept the Taliban flush with cash, say several current and former Afghan and U.S. officials who described what they say are hours of wiretaps, information provided by informers and financial documents connected with the bank where Mr. Azimi works. (Photo: JoŽl van Houdt for The Wall Street Journal)

Using intelligence drawn in part from informants and a powerful wiretapping system, these officials say they have found an economic and political order—underwritten by billions of dollars in aid, reconstruction and logistics funds from the West—that is undermining the Afghan government from within and aiding a Taliban insurgency that is trying to topple it from without.

The officials and their Afghan allies have had less success, however, breaking these bonds.

The futile attempts so far at prosecuting one individual—a banker named Haji Muhammad Rafi Azimi—illustrate the depth the problem.

Mr. Azimi has bribed senior officials, moved money for drug traffickers and kept the Taliban flush with cash, say several current and former Afghan and U.S. officials who described what they say are hours of wiretaps, information provided by informers and financial documents connected with the bank where Mr. Azimi works.

In an interview, Mr. Azimi denied any wrongdoing.

Mr. Azimi features in several of the scores of PowerPoint slides drawn up to chart the Malign Actor Networks, officials say, with squiggly lines that represent family ties, business partnerships or other links that connect people from spheres across Afghanistan.

In November 2009, Afghan prosecutors issued a warrant for Mr. Azimi's arrest after he was allegedly heard on a wiretap discussing bribes paid to the country's then-Islamic affairs minister. Such payments would secure government contracts for Mr. Azimi's travel business to take Muslims on the annual Hajj pilgrimage to Mecca in Saudi Arabia, Afghan and U.S. officials say.

The minister fled Afghanistan before he could be arrested.

Almost immediately, President Karzai asked Afghanistan's Attorney General to quash the warrant against Mr. Azimi, according to a former Afghan prosecutor involved in the investigation. The action was taken because of Mr. Azimi's connections to top officials, said a senior adviser to President Karzai.

Mr. Karzai's office denied meddling in the investigation.

In an interview, Deputy Attorney General Rahmatullah Nazari said prosecutors didn't charge Mr. Azimi because they lacked evidence. He also said wiretaps aren't admissible in Afghan courts and that authorities felt it "unfair that a minister [who allegedly took bribes] should be free while another man sat in jail."

Yet a lower-ranking Islamic Affairs Ministry official connected to the case was convicted in May, in part because of a wiretap recording in which Mr. Azimi was heard discussing the alleged bribes. The recording prompted the judge to ask why Mr. Azimi wasn't on trial, said Afghan and U.S. officials who have seen a videotape of the proceedings.

Mr. Azimi denied giving bribes. Of the wiretap, he said: "It is not my voice."

Officials say the case against Mr. Azimi exemplifies how a major, two-year campaign to cut Taliban funding and clean up President Karzai's corrupt administration is floundering, in part because of resistance from the president himself.

"Everyone's got protection here," said a U.S. official in Kabul involved in the investigations. "No one's afraid of getting caught so no one's got to take a fall."

Mr. Azimi said talk of his Taliban ties are "rumors" and dismissed corruption accusations. "In business, you have rivals," he said in an interview in his office at the glass Kabul headquarters of Afghan United Bank, where he serves as vice chairman, adding that the Taliban has threatened him and his wife and seven children, who now live in nearby Dubai.

He added that he is widely trusted in Kabul's business and political community. "In Afghanistan, there is no business without trust," he said.

Going after corruption is seen as a crucial facet of the U.S. surge strategy, needed to restore the government's credibility with Afghans in areas retaken from the Taliban. Yet with President Barack Obama's July 2011 deadline to start withdrawing U.S. forces approaching, many Afghan and U.S. officials say the efforts have so far yielded few results.

"In this government, we have mafia networks," Afghan national security adviser Rangin Dadfar Spanta said in an interview. These networks "begin with the financial banking system, with corruption networks, with reconstruction and security firms and also with drugs and with Taliban; they are in parliament and they are in government."

In those networks, U.S. and Afghan investigators say, Mr. Azimi is a player.

Apart from the alleged bribes to win Hajj business, wiretaps have also captured a voice investigators say is Mr. Azimi's allegedly bribing an official to shut down an investigation into a money-transfer firm linked to him, and talking with Taliban commanders about transferring funds. The speaker on these tapes has also bragged to associates that the Americans were listening and would never put him in jail, say people who have heard them.

Mr. Azimi said he has never spoken with a Taliban member, saying any conversations must have been mistranslated or misunderstood by U.S. officials.

Mr. Azimi was on the board of directors of the Afghanistan Chamber of Commerce until last year and once ran the influential association of money changers.

He also is an occasional informant for Afghanistan's U.S.-funded intelligence service, the National Directorate of Security, say people familiar with the matter. Afghan officials say he hasn't provided much helpful information. The NDS declined to comment.

Mr. Azimi came to attention of U.S. investigators and intelligence agents roughly two years ago, when a powerful wiretapping system came online as part of efforts to disrupt Taliban financing networks.

Investigators started picking up conversations that included individuals from across Afghan's business and political elite, and members of the insurgency, said a former U.S. official involved in the initial wiretapping effort.

"All these people talking about bribes and pretty much any kind of corruption you can imagine started coming up" on the wiretaps, the official said. "It was all linked together."

Links began emerging between various individuals who themselves were suspected of various crimes, from taking and passing bribes to moving money for the Taliban. "We looked around and realized how deep all this ran. The corruption went from the top [of the government] to the bottom," said another U.S. official. "It ran sideways to the Taliban. It went in every direction."

U.S. officials say they have recorded phone conversations between Mr. Azimi and the Taliban, who they say used a money-transfer service linked to Mr. Azimi, called new Ansari Exchange, to move money.

Mr. Azimi says his bank has cut its links to New Ansari, an assertion that U.S. and Afghan investigators dispute, citing evidence from wiretaps, documents and informants.

In one conversation recorded last year, recounted by U.S. officials, a Taliban commander is heard apologizing for accidentally kidnapping Mr. Azimi's brother. The Taliban commander promised to release the man immediately, these officials said.

Mr. Azimi caught U.S. attention again over the summer, when U.S. and Afghan officials say he used intermediaries to try to bribe an aide to President Karzai to halt an investigation into New Ansari.

The attempted bribe—a car worth about $10,000 for the son of the Karzai aide—led to the aide's nighttime arrest by a pair of Western-backed Afghan investigation units. President Karzai ordered the aide's release.

Mr. Azimi denied the allegation. Prosecutors have since dropped the investigation.

Teams of Afghan investigators in the country's Interior Ministry—trained and vetted by U.S. officials—continue to do their anti-corruption work. Afghan officials say they have developed more than three dozen corruption and drug smuggling cases against senior Afghan officials, many of them cabinet ministers.

But a senior U.S. official says these investigations have hit a roadblock at the Attorney General's office, where the official says the Karzai administration has sought to "eviscerate" a specially vetted anti-corruption cell of prosecutors by forcing out its chief and limiting the access of U.S. and British advisers.

"We've got investigations," the official said. But prosecutions "are in a deep freeze."